U.S. patent application number 13/424042 was filed with the patent office on 2012-09-20 for payment system and method using commodity-based electronically traded funds.
This patent application is currently assigned to DARIC, INC.. Invention is credited to Gregory Paul Ryan.
Application Number | 20120239543 13/424042 |
Document ID | / |
Family ID | 46829247 |
Filed Date | 2012-09-20 |
United States Patent
Application |
20120239543 |
Kind Code |
A1 |
Ryan; Gregory Paul |
September 20, 2012 |
Payment System and Method Using Commodity-Based Electronically
Traded Funds
Abstract
A system and a method are disclosed for using a commodity-based
exchange traded fund (ETF) to implement an electronic payment
currency. The commodity-based ETF provides an inflation mirror
using a basket of tradable commodities such as metals, energy,
agricultural products, etc. Shares of the commodity-based ETF
function as an electronic currency unit for use in transactions. A
user may direct the system to transfer shares of the
commodity-based ETF to a merchant in exchange for non-currency
consideration such as goods and services.
Inventors: |
Ryan; Gregory Paul;
(Hillsborough, CA) |
Assignee: |
DARIC, INC.
Hillsborough
CA
|
Family ID: |
46829247 |
Appl. No.: |
13/424042 |
Filed: |
March 19, 2012 |
Related U.S. Patent Documents
|
|
|
|
|
|
Application
Number |
Filing Date |
Patent Number |
|
|
61454451 |
Mar 18, 2011 |
|
|
|
61454463 |
Mar 18, 2011 |
|
|
|
61454467 |
Mar 18, 2011 |
|
|
|
Current U.S.
Class: |
705/37 |
Current CPC
Class: |
G06Q 20/10 20130101;
G06Q 40/04 20130101; G06Q 20/12 20130101 |
Class at
Publication: |
705/37 |
International
Class: |
G06Q 40/04 20120101
G06Q040/04 |
Claims
1. A method, comprising: receiving a request from a computing
device associated with a user to make a payment to a merchant
account, the payment comprising a first quantity denominated in a
fiat currency; authenticating the user; transferring a second
quantity of shares of an exchange traded fund (ETF) to the merchant
account from a user account, the user account associated with the
user, the ETF a commodity-based fund comprising shares of component
commodities, the second quantity of shares determined based on the
first quantity denominated in the fiat currency; confirming to a
merchant associated with the merchant account that the transfer of
the second quantity of shares of the ETF has been made to the
merchant account from the user account; and receiving a
notification of a transfer of a non-monetary interest from the
merchant to the user.
2. The method of claim 1, wherein determining the second quantity
of shares based on the first quantity denominated in the fiat
currency, further comprises determining the market price of a share
of the ETF.
3. The method of claim 1, further comprising determining if the
user account has at least the second quantity of shares in it.
4. The method of claim 1, further comprising receiving a request
from a user to purchase a third quantity of shares of the ETF based
on a fourth quantity of fiat currency.
5. The method of claim 4, further comprising transferring to the
user account the third quantity of shares of the ETF, and
purchasing a fifth quantity of shares of component commodities of
the ETF, the fifth quantity based on the third quantity, the market
price of the component commodities and the inflation rate.
6. An ETF-based electronic payment system comprising: a computer
server configured to receive a request from a computing device
associated with a user to make a payment to a merchant account, the
payment comprising a first quantity denominated in a fiat currency;
an encryption and authentication system configured to authenticate
the user; a commodity ETF share transfer mechanism configured to
transfer a second quantity of shares of the ETF to the merchant
account from a user account, the user account associated with the
user, the ETF a commodity-based fund comprising shares of component
commodities, the second quantity of shares determined based on the
first quantity denominated in the fiat currency; a merchant
commodity ETF interface configured to confirm to a merchant
associated with the merchant account that the transfer of the
second quantity of shares of the ETF has been made to the merchant
account from the user account; and a notification module configured
to receive a notification of a transfer of a non-monetary interest
from the merchant to the user.
7. The system of claim 6, wherein determining the second quantity
of shares based on the first quantity denominated in the fiat
currency, further comprises determining the market price of a share
of the ETF.
8. The system of claim 6, further comprising, determining if the
user account has at least the second quantity of shares in it.
9. The system of claim 6, further comprising, receiving a request
from a user to purchase a third quantity of shares of the ETF based
on a fourth quantity of fiat currency.
10. The system of claim 9, further comprising, transferring to the
user account the third quantity of shares of the ETF, and
purchasing a fifth quantity of shares of component commodities of
the ETF, the fifth quantity based on the third quantity, the market
price of the component commodities and the inflation rate.
11. A computer readable medium configured to store instructions,
the instructions when executed by a processor cause the processor
to: receive a request from a computing device associated with a
user to make a payment to a merchant account, the payment
comprising a first quantity denominated in a fiat currency;
authenticate the user; transfer a second quantity of shares of an
exchange traded fund (ETF) to the merchant account from a user
account, the user account associated with the user, the ETF a
commodity-based fund comprising shares of component commodities,
the second quantity of shares determined based on the first
quantity denominated in the fiat currency; confirm to a merchant
associated with the merchant account that the transfer of the
second quantity of shares of the ETF has been made to the merchant
account from the user account; and receive a notification of a
transfer of a non-monetary interest from the merchant to the
user.
12. The computer readable medium of claim 11, wherein the
instructions to determine the second quantity of shares based on
the first quantity denominated in the fiat currency further
comprise instructions that cause the processor to determine the
market price of a share of the ETF.
13. The computer readable medium of claim 11, further comprising
instructions that cause the processor to determine if the user
account has at least the second quantity of shares in it.
14. The computer readable medium of claim 11, further comprising
instructions that cause the processor to receive a request from a
user to purchase a third quantity of shares of the ETF based on a
fourth quantity of fiat currency.
15. The computer readable medium of claim 11, further comprising
instructions that cause the processor to transfer to the user
account the third quantity of shares of the ETF, and purchase a
fifth quantity of shares of component commodities of the ETF, the
fifth quantity based on the third quantity, the market price of the
component commodities and the inflation rate.
Description
CROSS REFERENCE TO RELATED APPLICATIONS
[0001] This application claims the benefit of U.S. Provisional
Applications No. 61/454,451, filed Mar. 18, 2011, No. 61/454,463,
filed Mar. 18, 2011, and No. 61/454,467, filed Mar. 18, 2011, each
of which is incorporated by reference in its entirety.
FIELD OF ART
[0002] The disclosure generally relates to the field of electronic
payment systems and electronic payment currencies.
BACKGROUND
[0003] Currencies historically have been backed by physical
substances having intrinsic value. The physical substances may be
gold, silver, copper, shells, etc. Currency could be exchanged for
these physical substances. By contrast, current nation state issued
fiat currencies have value based solely on faith in governments
issuing the money. The fiat currencies have no intrinsic value and
are not fixed in value compared to any objective standard. A
citizen of a nation state cannot give the government fiat currency
and ask for gold or silver in exchange. Since nation state
currencies require no backing, it is incredibly tempting for
governments to simply issue additional currency, particularly in
times of duress. Issuance of additional currency by a particular
nation state devalues existing currency (inflation), and
individuals holding the currency are forced to look for alternative
places to hold their wealth, lest they lose their purchasing power.
Some individuals may look toward preserving wealth in currencies of
other nation states. However, all nation states currently use fiat
money and users of the fiat money are subject to the same
mismanagement, political, and inflation risks. Preserving wealth in
other currencies also introduces foreign exchange overhead and
currency exchange risk. Hedging against exchange rate fluctuations
introduces additional overhead.
[0004] Some individuals have invested in physical assets such as
gold or real-estate. Maintaining wealth in physical assets such as
gold or real-estate may reduce inflation risk, but physical assets
are difficult to transfer, may be illiquid, and are impractical for
use in business transactions.
BRIEF DESCRIPTION OF DRAWINGS
[0005] The disclosed embodiments have other advantages and features
which will be more readily apparent from the detailed description,
the appended claims, and the accompanying figures (or drawings). A
brief introduction of the figures is below.
[0006] FIG. 1 illustrates a particular example of a system for
implementing an electronic payment currency.
[0007] FIG. 2 illustrates a particular example of a system for
conducting a transaction using an electronic payment currency.
[0008] FIG. 3 illustrates a particular example of a commodities
exchange traded fund (ETF) backed payment currency.
[0009] FIG. 4 illustrates a particular example of a technique for
implementing an electronic payment currency.
[0010] FIG. 5 illustrates a particular example of a technique for
conducting a transaction.
[0011] FIG. 6 illustrates a particular example of the use of an
electronic payment currency in e-commerce.
[0012] FIG. 7 illustrates a particular example of a payment
processing system.
DETAILED DESCRIPTION
[0013] Techniques and mechanisms are provided for improving upon
existing fiat currency systems.
[0014] The Figures and the following description relate to
preferred embodiments by way of illustration only. It should be
noted that from the following discussion, alternative embodiments
of the structures and methods disclosed herein will be readily
recognized as viable alternatives that may be employed without
departing from the principles of what is claimed.
[0015] The techniques and mechanisms of the present invention
provide for an electronic currency that preserves wealth against
political risks, foreign exchange risks, inflation risks, etc.
According to various embodiments, the electronic currency is
provided as shares of a commodity-based exchange traded fund (ETF).
The commodity-based ETF reflects the inherent value of assets such
as metals, agricultural products, energy resources, etc. In
particular embodiments, the commodity-based ETF tracks inflation
and provides investors with units or shares that can be used to
make domestic and international purchase transactions. According to
various embodiments, units or shares of a commodity-based ETF can
be used in lieu of nation state based currencies to make
transactions. Debit cards and checks can draw from a
commodity-based ETF account. Payments of units or shares can be
made from one account holder directly to another account holder for
goods and services without exchanging any currencies or making any
foreign exchange transactions.
[0016] Commodity-based ETFs generally use commodity futures,
over-the-counter forward contracts, or stocks of companies that
derive their income from commodities as an underlying asset.
According to various embodiments, a commodity-based ETF includes
investments in the following: precious metals (e.g., gold, silver,
platinum), energy (e.g., heating oil, crude, natural gas),
agriculture (e.g., wheat, corn, soybeans, live cattle, lean hogs,
cotton, coffee, cocoa, sugar, orange juice) and base metals (e.g.,
copper, aluminum, zinc). In particular embodiments, a
commodity-based ETF provides a low cost, highly liquid investment
avenue for risk-averse investors, who are primarily concerned about
preserving the value of their money. The portfolio is constructed
in such a way that it keeps the pace with inflation or slightly
outperforms inflation.
[0017] A slightly heavier weighting in precious metals and a
smaller weighting in the more volatile energy and grain sectors
more accurately responds to the fluctuations in the U.S. Dollar and
inflation concerns. The more stable prices of meats and softs
reduce the volatility of the index as a whole and counter the
fluctuations in the other sectors. Overall, the portfolio is
balanced with a well-diversified set of inflation hedges.
[0018] Users can make payments through cell phones, personal
computers, mobile devices, debit cards, checks, terminals,
passphrases, or other identifiers that can securely authenticate a
user. Users including merchants can also receive payments using the
same mechanisms.
[0019] Reference will now be made in detail to several embodiments,
examples of which are illustrated in the accompanying figures. It
is noted that wherever practicable similar or like reference
numbers may be used in the figures and may indicate similar or like
functionality. The figures depict embodiments of the disclosed
system (or method) for purposes of illustration only. One skilled
in the art will readily recognize from the following description
that alternative embodiments of the structures and methods
illustrated herein may be employed without departing from the
principles described herein.
Configuration Overview
[0020] One embodiment of a disclosed system, method and computer
readable storage medium that includes a method, comprising
receiving a request from a computing device associated with a user
to make a payment to a merchant account, the payment comprising a
first quantity denominated in a fiat currency. Authenticating the
user and transferring a second quantity of shares of an ETF to the
merchant account from a user account associated with the user. The
ETF is a commodity-based fund comprising shares of component
commodities and the second quantity of shares is determined based
on the first quantity denominated in the fiat currency. The method
confirms to a merchant associated with the merchant account that
the transfer of the second quantity of shares of the ETF has been
made to the merchant account from the user account and a
notification is received of a transfer of a non-monetary interest
from the merchant to the user.
Description of Embodiments
[0021] The techniques and mechanisms of the present invention will
be described in the context of commodities ETF-backed payment
currencies. However, it should be noted that the techniques and
mechanisms of the present invention apply to a variety of different
data constructs including variations to data blocks. In the
following description, numerous specific details are set forth in
order to provide a thorough understanding of the present invention.
Particular example embodiments of the present invention may be
implemented without some or all of these specific details. In other
instances, well known process operations have not been described in
detail in order not to unnecessarily obscure the present
invention.
[0022] Techniques and mechanisms are provided for using a payment
currency such as a commodity-based ETF payment currency. Units of a
commodity-based ETF may correspond to shares or partial shares of a
basket of tradable commodities such as metals, energy, agricultural
products, and/or other assets. The commodity-based ETF provides an
inflation mirror. Units or shares of the commodity-based ETF can
function as an alternative electronic currency for use in domestic
and international transactions. The alternative electronic currency
reduces foreign exchange overhead and reduces inflation, political,
and mismanagement risk inherent in fiat currencies. A user or
merchant having a commodity ETF interface can receive payment for
goods/services through the commodity ETF interface. Users transfer
shares of the commodity-based ETF to the merchant using a merchant
commodity ETF interface that may include modalities such as near
field communication receivers, card readers, computer systems,
terminals, radio frequency identification readers, etc. Units or
shares of the commodity-based ETF can function as an alternative
payment currency for use in domestic and international
transactions. A commodity-based ETF transfer system is associated
with an account database. A commodity-based ETF share transfer
mechanism may transfer shares from a user account to a target
account in exchange for non-currency consideration. Thus users may
pay for goods and services without the transfer of fiat currency
payments.
Embodiment of a System for Implementing Electronic Payment
Currency
[0023] FIG. 1 illustrates one example of a system for implementing
a commodity ETF based payment currency. According to various
embodiments, users 101, 102, and 103 access a fiat currency
interface 111. Users 101, 102, and 103 may be using computer
systems, mobile devices, debit cards, near field communication
devices, biometric identifiers, etc., to access the fiat currency
interface 111. According to various embodiments, the fiat currency
interface is an application that allows transfer of fiat currencies
such as Dollars, Yen, Euros, Krona, Francs, Won, etc., to a fiat
currency to commodity ETF share exchange 121. According to various
embodiments, transactions and data are encrypted and authenticated
using a cryptographic encryption and authentication system 113.
Cryptography may involve symmetric encryption, public-key
private-key encryption, digital signatures, etc. In particular
embodiments, any account access, exchange, or communication is
encrypted. User account data 123 is maintained and replicated using
user account data mirrors 125.
[0024] Fiat currencies are exchanged for commodity-based ETF units
or shares at the exchange 121. The number of shares of the
commodity-based ETF that are credited to the user account is
determined based on the real value of the fiat currency or
currencies exchanged. Commodity ETF components are analyzed using a
commodity ETF component analyzer 131 and rebalanced using a
commodity ETF component rebalancer 133 based on accumulation or
withdrawal of shares. When a user exchanges a fiat currency for
shares of the commodity-based ETF, the rebalancer 133 may transfer
existing shares of the ETF to the user's account. However, if large
numbers of shares are being purchased (by single or multiple users)
there may be insufficient shares in reserve to transfer to these
users. In this case the rebalancer 133 may generate additional
shares of the commodity-based ETF to transfer to user accounts. In
ordinary circumstances generating additional shares of the ETF to
transfer to users would debase the existing ETF shares, however,
debasement can be avoided by purchasing additional shares of
component commodities to offset the issuance of new ETF shares. The
increase in the total commodity holdings of the ETF offsets the
increase in volume of ETF shares issued and prevents debasement of
the existing ETF shares.
[0025] When users exchange shares of the commodity-based ETF for a
fiat currency, fiat currency may be transferred to their account
from the reserves of the system, and shares of the commodity-based
ETF may be moved from the users' account to the system reserve.
These shares may be transferred to other users in exchange for fiat
currency payments to replenish the system's currency reserves. If
the system has insufficient fiat currency in reserve to make a
payment to a user in exchange for that user's ETF shares, the
rebalancer 133 may sell shares of component commodities in the
market to obtain the necessary fiat currency funds. To avoid
debasing the ETF shares in this situation, a proportionate number
of ETF shares may be removed from circulation to reflect the
reduction in the total value of the ETF. Similarly, when a user
exchanges fiat currency for shares of the commodity-based ETF, if
shares are not available in reserve to transfer to the user, the
rebalancer 133 may purchase commodity components of the ETF on the
market using the fiat currency that has been deposited, and new
shares of the ETF may be generated without debasing the value of
the existing ETF shares.
[0026] A commodity ETF inflation tracker 135 gauges whether
commodity ETF components 141 are accurately tracking inflation. The
commodity ETF inflation tracker 135 may direct the component
rebalancer 133 to sell or buy shares of various component
commodities based on the requirements of inflation tracking
[0027] According to various embodiments, the commodity-based ETF
includes a basket of commodities with the goal of mirroring
inflation as closely as possible. When the fund reaches a critical
mass, the fund may be used with a payment platform to have shares
in the ETF function as an alternative electronic currency that can
be used to make payments for goods and services. A transaction fee
may be charged to generate a revenue stream. Users may keep their
currency in the form of shares of the commodity-based ETF. An
advantage of the disclosed configuration is a liquid currency
processing system that also provides protection from government
mismanagement of fiat currency, inflation, and political risk.
Example Transaction Using an Electronic Payment Currency
[0028] FIG. 2 illustrates one example of a payment system using a
commodity-based ETF. According to various embodiments, users 201,
203, and 205 access a commodity ETF share transfer mechanism 221
through a secured system 213 using commodity ETF access modalities
211. Users may access commodity ETF assets using modalities 211
such as payment cards, mobile devices, near field communication,
computer systems, biometric identifiers, passphrases, terminals,
etc. In particular embodiments, a user name password identifies a
user. In other examples, biometric data, a mobile device
identifier, radio frequency identifier chip, custom data sequences
and numbers, etc., are used to identify and/or authenticate a user.
A user 201, 203, and 205 may similarly specify a target for a
payment using biometric data, a mobile device identifier, radio
frequency identifier chip, custom data sequences and numbers,
target devices, near field communication receivers, etc., near
field communication, terminals, mobile device, passphrases,
merchant devices, etc.
[0029] A user 201, 203, and 205 may also specify a number of shares
to transfer to a target merchant or user in exchange for goods,
services, or other non-monetary interest. If the target merchant or
user resides in a foreign jurisdiction with its own nation state
currency, no foreign exchange or foreign exchange overhead is
required. Payment is made from a user account to a target account
in shares of an ETF, such as a commodity-based ETF. A commodity ETF
share transfer mechanism 221 verifies the authenticity of the user
and target and commits user account data 223. The user account data
may also be mirrored at 225.
[0030] According to various embodiments, merchants 241 may simply
be users having access to the same commodity ETF access modalities
211. Alternatively, merchants may have their own merchant commodity
ETF interfaces 231 specialized for receiving commodity ETF shares.
A merchant commodity ETF interface may be a terminal, a near field
communication receiver, a biometric data receiver, email address,
data sequence and number receiver, terminal, card reader, radio
frequency identification receiver, etc. The merchant commodity ETF
interface may also have its own encryption and authentication
system 233.
Example Commodity-Based ETF for Backing a Payment Currency or
Payment System
[0031] FIG. 3 illustrates one example of a commodity-based ETF that
can be used to back a payment currency or electronic payment
currency. According to various embodiments, a currency is based on
assets having high liquidity. In particular embodiments, the
currency will be based on a basket of tradable commodities.
Inclusions in the basket may be precious metals (e.g., gold,
silver, platinum), energy (e.g., heating oil, crude, natural gas),
agriculture (e.g., wheat, corn, soybeans, live cattle, lean hogs,
cotton, coffee, cocoa, sugar, orange juice), and base metals (e.g.,
copper, zinc, aluminum). In particular embodiments, the
commodity-based ETF will use commodity futures, over-the-counter
forward contracts, or stocks of companies that derive their income
from commodities as an underlying asset. A slightly heavier
weighting in precious metals and a smaller weighting in the more
volatile energy and grain sectors more accurately responds to the
fluctuations in the US dollar (USD) and inflation concerns. The
more stable prices of meats and softs reduce the volatility of the
index as a whole and counter the fluctuations in the other sectors.
Overall, the portfolio is balanced with a well-diversified set of
inflation hedges. According to various embodiments, weights among
subgroups of commodities are dynamically changed and reassigned to
mirror inflation. In other examples, total market index based ETF
may be used as a basis for a payment currency. A variety of other
indices could potentially be integrated.
Example Method for Exchanging FIAT Currency for Electronic Payment
Currency
[0032] FIG. 4 illustrates one example of a technique for
implementing an electronic payment currency. According to various
embodiments, fiat currency is accessed at 401. Fiat currency may be
accessed via electronic funds transfer, payment cards, computer
systems, wire transfers, etc. A user is authenticated at 403.
Authenticating a user may involve verifying a mobile device
electronic serial number or other mobile identifier. Authenticating
a user may also involve symmetric key or asymmetric key
verification at 405. Once the user is authenticated user account
data is accessed at 407. A share allocation is determined for the
authenticated user at 409 based on the value of fiat currency that
is transferred to the user account. User account data, including
the share allocation, is committed at 411. Commodity-based ETF
assets may be adjusted at 413. Reserves may be maintained to handle
payouts, but if reserves are insufficient to manage a requested
payout, then commodity contracts may be bought or sold based on the
transaction at 413. According to various embodiments, ETF component
assets may be rebalanced at 415 so that the ETF continues to track
and mirror inflation. Rebalancing may itself require additional
buying and/or selling of commodity contracts.
Example Process for Implementing Electronic Payment Currency
Exchange
[0033] FIG. 5 illustrates one example of a technique for electronic
payment currency exchange. A user is authenticated at 501.
Authenticating a user may involve verifying a mobile device
electronic serial number or other mobile identifier. Authenticating
a user may also involve symmetric key or asymmetric key
verification. A request is received to transfer commodity-based ETF
shares from a user account to a target account (e.g. a merchant's
account) in exchange for goods/services at 503. Notification may be
sent to the system that goods/services were transferred from the
merchant to the user. Account information may be accessed for a
user at 505. For instance, the service may take the opportunity to
verify that the user has sufficient shares of the commodity-based
ETF to satisfy the transaction requested. Next, the target account
may be authenticated at 507. Information for the target account may
be accessed. A share transfer is made to the target account at 509
based on the transaction requested by the user. A secure share
transfer is committed at 511. A goods and services transfer is
committed to the user at 513. Account information is updated at 515
for both the user account and the target account. The updated
account information may include the updated account balance for
both the user account and the target account. Transaction records
may be generated to record the transaction information.
Example E-Commerce Transaction Using ETF-Based Electronic Payment
Currency
[0034] FIG. 6 illustrates one example of using an ETF-based
electronic payment currency in e-commerce. In this example an
ETF-based electronic payment system 600 communicates with a user
client 601 and a merchant server 602 over a network such as the
Internet. The ETF-based payment system 600 may include components
described earlier such as the fiat currency interface 111,
encryption and authentication system 113, fiat currency to
commodity ETF share exchange 121, user account data 123, commodity
ETF component analyzer 131, commodity ETF component rebalancer 133,
commodity ETF inflation tracker 135, commodity ETF share transfer
mechanism 221, merchant commodity ETF interface 231, etc. The user
client 601 may be any manner of computing device capable of
communicating over the network with the ETF payment system 600 and
the Merchant Server 602. Examples of user clients 601 include smart
phones, personal computers, tablet computers, laptop computers,
etc. The merchant server 602 may be any manner of computer server
operated by a merchant. Examples include web servers hosting
shopping websites, service websites such as airline booking sites,
auction websites such as EBAY, etc.
[0035] As a first step the user client 601 and merchant server 602
interact while the user browses and orders goods/services on the
merchant website. In general the browsing and ordering 603 includes
two-way communication between the user client 601 and the merchant
server 602. For example, a user may request a web page containing
product descriptions from the merchant server, may receive that web
page, and then may make an item purchase request through the
merchant's shopping interface. The user may make a purchase
request, for example, by adding an item to an online shopping cart
and clicking a "buy" button on the merchant's website. Once the
user makes the purchase request, payment details such as price may
be sent to the user client 601.
[0036] Based on the price of goods or services selected for
purchase by the user, the user client 601 may send a payment
request 604 to the ETF payment system 600 based on an amount
requested by the merchant. The payment requested by the merchant
may be denominated in a fiat currency, for example U.S. Dollars, or
it may be denominated based on units of ETF-based shares. In some
cases the merchant server 602 may send the payment request 604
directly to the ETF payment system, instead of the user client 601
sending the payment request.
[0037] Regardless of the source of the payment request, the ETF
payment system 600 will first identify and authenticate 605 the
user operating the user client 601. The identification and
authentication may be done using a username/password system, a
biometric ID system, or any other authentication system used in
e-commerce. At this point the ETF payment system 600 may also
confirm that the user has sufficient funds in their user account to
meet the payment request. If the payment request was designated in
a fiat currency, the ETF payment system 600 may determine the
current ETF share market value in that fiat currency and use this
value to determine the ETF shares necessary to make the payment.
For example, if the payment requested is $100 and the market price
of an ETF share is $10, then the number of ETF shares necessary to
make the payment is 10.
[0038] As part of the identification/authentication process the ETF
payment system 600 may send a payment confirmation request 606 to
the user client 601. The payment confirmation request 606 is used
to confirm that the user has authorized the payment. The payment
confirmation request 606 may include a request for a user code or
password to confirm the user's identity. The user confirms the
payment by sending a payment confirmation 607 from the user client
601 to the ETF payment system 600. The payment confirmation 607 may
include a user code or password response.
[0039] Once the confirmation is received from the user, the ETF
payment system 600 transfers 608 an appropriate number of ETF
shares from the user's account to the merchant's account. The
number of shares transferred will depend on the payment requested.
Once the transfer is completed, the ETF payment system 600 will
send a payment transfer confirmation 609 to the merchant server
602.
[0040] Once the merchant server 602 has received confirmation that
the payment has been made, the merchant may transfer goods 610 or
render services to the user. If the goods are digital goods such as
music files, movie files, data, etc., these goods may be
transferred directly to the user client 601. Once the transfer of
goods or services has been completed, the merchant server 602 may
also send a goods transfer confirmation 611 back to the ETF payment
system to confirm that the goods or services have been rendered to
the user.
Computing Machine Architecture
[0041] A variety of devices and applications can implement
particular examples of a commodity-based ETF payment currency
system. FIG. 7 illustrates one example of a computer system. FIG. 7
is a block diagram illustrating components of an example machine
able to read instructions from a machine-readable medium and
execute them in a processor (or controller). Specifically, FIG. 7
shows a diagrammatic representation of a machine in the example
form of a computer system 700 within which instructions 724 (e.g.,
software) for causing the machine to perform any one or more of the
methodologies discussed herein may be executed. In alternative
embodiments, the machine operates as a standalone device or may be
connected (e.g., networked) to other machines. In a networked
deployment, the machine may operate in the capacity of a server
machine or a client machine in a server-client network environment,
or as a peer machine in a peer-to-peer (or distributed) network
environment.
[0042] The machine may be a server computer, a client computer, a
personal computer (PC), a tablet PC, a set-top box (STB), a
personal digital assistant (PDA), a cellular telephone, a
smartphone, a web appliance, a network router, switch or bridge, or
any machine capable of executing instructions 724 (sequential or
otherwise) that specify actions to be taken by that machine.
Further, while only a single machine is illustrated, the term
"machine" shall also be taken to include any collection of machines
that individually or jointly execute instructions 724 to perform
any one or more of the methodologies discussed herein.
[0043] The example computer system 700 includes a processor 702
(e.g., a central processing unit (CPU), a graphics processing unit
(GPU), a digital signal processor (DSP), one or more application
specific integrated circuits (ASICs), one or more radio-frequency
integrated circuits (RFICs), or any combination of these), a main
memory 704, and a static memory 706, which are configured to
communicate with each other via a bus 708. The computer system 700
may further include graphics display unit 710 (e.g., a plasma
display panel (PDP), a liquid crystal display (LCD), a projector,
or a cathode ray tube (CRT)). The computer system 700 may also
include alphanumeric input device 712 (e.g., a keyboard), a cursor
control device 714 (e.g., a mouse, a trackball, a joystick, a
motion sensor, or other pointing instrument), a storage unit 716, a
signal generation device 718 (e.g., a speaker), and a network
interface device 820, which also are configured to communicate via
the bus 708.
[0044] The storage unit 716 includes a machine-readable medium 722
on which is stored instructions 724 (e.g., software) embodying any
one or more of the methodologies or functions described herein. The
instructions 724 (e.g., software) may also reside, completely or at
least partially, within the main memory 704 or within the processor
702 (e.g., within a processor's cache memory) during execution
thereof by the computer system 700, the main memory 704 and the
processor 702 also constituting machine-readable media. The
instructions 724 (e.g., software) may be transmitted or received
over a network 726 via the network interface device 720.
[0045] While machine-readable medium 722 is shown in an example
embodiment to be a single medium, the term "machine-readable
medium" should be taken to include a single medium or multiple
media (e.g., a centralized or distributed database, or associated
caches and servers) able to store instructions (e.g., instructions
724). The term "machine-readable medium" shall also be taken to
include any medium that is capable of storing instructions (e.g.,
instructions 724) for execution by the machine and that cause the
machine to perform any one or more of the methodologies disclosed
herein. The term "machine-readable medium" includes, but not be
limited to, data repositories in the form of solid-state memories,
optical media, and magnetic media.
Additional Configuration Considerations
[0046] Throughout this specification, plural instances may
implement components, operations, or structures described as a
single instance. Although individual operations of one or more
methods are illustrated and described as separate operations, one
or more of the individual operations may be performed concurrently,
and nothing requires that the operations be performed in the order
illustrated. Structures and functionality presented as separate
components in example configurations may be implemented as a
combined structure or component. Similarly, structures and
functionality presented as a single component may be implemented as
separate components. These and other variations, modifications,
additions, and improvements fall within the scope of the subject
matter herein.
[0047] Certain embodiments are described herein as including logic
or a number of components, modules, or mechanisms. Modules may
constitute either software modules (e.g., code embodied on a
machine-readable medium or in a transmission signal) or hardware
modules. A hardware module is tangible unit capable of performing
certain operations and may be configured or arranged in a certain
manner. In example embodiments, one or more computer systems (e.g.,
a standalone, client or server computer system) or one or more
hardware modules of a computer system (e.g., a processor or a group
of processors) may be configured by software (e.g., an application
or application portion) as a hardware module that operates to
perform certain operations as described herein.
[0048] In various embodiments, a hardware module may be implemented
mechanically or electronically. For example, a hardware module may
comprise dedicated circuitry or logic that is permanently
configured (e.g., as a special-purpose processor, such as a field
programmable gate array (FPGA) or an application-specific
integrated circuit (ASIC)) to perform certain operations. A
hardware module may also comprise programmable logic or circuitry
(e.g., as encompassed within a general-purpose processor or other
programmable processor) that is temporarily configured by software
to perform certain operations. It will be appreciated that the
decision to implement a hardware module mechanically, in dedicated
and permanently configured circuitry, or in temporarily configured
circuitry (e.g., configured by software) may be driven by cost and
time considerations.
[0049] The various operations of example methods described herein
may be performed, at least partially, by one or more processors
that are temporarily configured (e.g., by software) or permanently
configured to perform the relevant operations. Whether temporarily
or permanently configured, such processors may constitute
processor-implemented modules that operate to perform one or more
operations or functions. The modules referred to herein may, in
some example embodiments, comprise processor-implemented
modules.
[0050] The one or more processors may also operate to support
performance of the relevant operations in a "cloud computing"
environment or as a "software as a service" (SaaS). For example, at
least some of the operations may be performed by a group of
computers (as examples of machines including processors), these
operations being accessible via a network (e.g., the Internet) and
via one or more appropriate interfaces (e.g., application program
interfaces (APIs).)
[0051] The performance of certain of the operations may be
distributed among the one or more processors, not only residing
within a single machine, but deployed across a number of machines.
In some example embodiments, the one or more processors or
processor-implemented modules may be located in a single geographic
location (e.g., within a home environment, an office environment,
or a server farm). In other example embodiments, the one or more
processors or processor-implemented modules may be distributed
across a number of geographic locations.
[0052] Some portions of this specification are presented in terms
of algorithms or symbolic representations of operations on data
stored as bits or binary digital signals within a machine memory
(e.g., a computer memory). These algorithms or symbolic
representations are examples of techniques used by those of
ordinary skill in the data processing arts to convey the substance
of their work to others skilled in the art. As used herein, an
"algorithm" is a self-consistent sequence of operations or similar
processing leading to a desired result. In this context, algorithms
and operations involve physical manipulation of physical
quantities. Typically, but not necessarily, such quantities may
take the form of electrical, magnetic, or optical signals capable
of being stored, accessed, transferred, combined, compared, or
otherwise manipulated by a machine. It is convenient at times,
principally for reasons of common usage, to refer to such signals
using words such as "data," "content," "bits," "values,"
"elements," "symbols," "characters," "terms," "numbers,"
"numerals," or the like. These words, however, are merely
convenient labels and are to be associated with appropriate
physical quantities.
[0053] Unless specifically stated otherwise, discussions herein
using words such as "processing," "computing," "calculating,"
"determining," "presenting," "displaying," or the like may refer to
actions or processes of a machine (e.g., a computer) that
manipulates or transforms data represented as physical (e.g.,
electronic, magnetic, or optical) quantities within one or more
memories (e.g., volatile memory, non-volatile memory, or a
combination thereof), registers, or other machine components that
receive, store, transmit, or display information.
[0054] As used herein any reference to "one embodiment" or "an
embodiment" means that a particular element, feature, structure, or
characteristic described in connection with the embodiment is
included in at least one embodiment. The appearances of the phrase
"in one embodiment" in various places in the specification are not
necessarily all referring to the same embodiment.
[0055] Some embodiments may be described using the expression
"coupled" and "connected" along with their derivatives. For
example, some embodiments may be described using the term "coupled"
to indicate that two or more elements are in direct physical or
electrical contact. The term "coupled," however, may also mean that
two or more elements are not in direct contact with each other, but
yet still co-operate or interact with each other. The embodiments
are not limited in this context.
[0056] As used herein, the terms "comprises," "comprising,"
"includes," "including," "has," "having" or any other variation
thereof, are intended to cover a non-exclusive inclusion. For
example, a process, method, article, or apparatus that comprises a
list of elements is not necessarily limited to only those elements
but may include other elements not expressly listed or inherent to
such process, method, article, or apparatus. Further, unless
expressly stated to the contrary, "or" refers to an inclusive or
and not to an exclusive or. For example, a condition A or B is
satisfied by any one of the following: A is true (or present) and B
is false (or not present), A is false (or not present) and B is
true (or present), and both A and B are true (or present).
[0057] In addition, use of the "a" or "an" are employed to describe
elements and components of the embodiments herein. This is done
merely for convenience and to give a general sense of the
invention. This description should be read to include one or at
least one and the singular also includes the plural unless it is
obvious that it is meant otherwise.
[0058] Upon reading this disclosure, those of skill in the art will
appreciate still additional alternative structural and functional
designs for a system and a process for an electronic payment system
using commodity-based exchange traded funds, through the disclosed
principles herein. Thus, while particular embodiments and
applications have been illustrated and described, it is to be
understood that the disclosed embodiments are not limited to the
precise construction and components disclosed herein. Various
modifications, changes and variations, which will be apparent to
those skilled in the art, may be made in the arrangement, operation
and details of the method and apparatus disclosed herein without
departing from the spirit and scope defined in the appended
claims.
* * * * *